Forum Archive

How do people think about how to calculate a ‘fair value’ for real estate without using comps?
The comment is often made on Brownstoner about that property values in general are way too high relative to incomes. The reponse from the bulls is generally relates to low interest rates and limited supply of high quality property.
So what metrics (other than comps) would readers use to estimate a fair value for a property? I presume it would involve some kind of multiple of income to determine the mortgage amount and then adjusted by a loan to value ratio to get a value for a property. I don’t know what the right income multiple would be, or the degree to which the prices of other assets (e.g. stock market levels etc) should matter at all.

Obviously there is no set answer. I am just really interested to hear how people derive their views of whether / how much the market as a whole is overvalued. Thanks.